Significance of Robotic Process Automation (RPA) in The Banking Industry

Technology is constantly advancing and evolving. It has certainly become an indispensable part of our lives and survival. Technological advancement and transformation are never ending phenomena and it continues to impact almost all the top global industries. One such industry that has experienced a massive shift and significant transformation due to the influence of technological innovations is the banking and finance industry. It is one of the most prominent industries of any economy and its development is of utmost importance. Among many other industries, banking and finance have been among the first to adopt and experience the benefits of technological wonders. From funds transfer to loan approvals, technology has simplified almost all the aspects of the banking sector, and it continues to make it productive and efficient. As the industry continues to grow, it has been hit by a new wave of technology, known as Robotic Process Automation.

This is the buzzword in the topmost industries around the world and is deemed to shift the landscape completely. Experts believe that this technology is a revolution of sorts and has the power to change the banking sector like never before. Let’s learn more about it.

What Is Robotic Process Automation?

Robotic Process Automation is often termed as RPA. As the name suggests, it is a scientific field of computer science that is rapidly emerging. RPA uses software or software robots to perform various tasks like automating transaction, processing data, communicating with systems, perform huge calculations, and problem-solving. Many industries are exploring the potential of this technology in order to simplify jobs, reduce human efforts, increase productivity and efficiency, and perform time-consuming jobs faster. RPA tools and software have the ability to mimic human abilities and actions to perform repetitive tasks quickly and accurately. It has proven efficient in tackling work overflow and heavy-data tasks.

Banking activities, in particular, involve high chances of human error and inaccuracy. With the help of RPA software, this challenge can be tackled effectively. Using RPA in banking and related sectors has reduced overhead and operation costs and increased the efficiency of the employees. Time-consuming tasks can be performed in minutes.

Each of these terms has individual meaning that makes this technology a reality. Robotics refers to the software, entities, or automated platforms that have the ability to mimic human actions such as learning, speech recognition, reasoning problem solving, planning, manipulation, perception, knowledge representation, data analysis, calculation and more.

Process is a reference to a sequence of steps that is implemented by a typical RPA tool in order to complete the task assigned or scheduled to perform. Automation refers to the technology by which a task is achieved with minimal to zero human assistance.

Hence, RPA is a technology that involves an entity with the ability to mimic human abilities in a sequence of steps to complete a task without human intervention. In today’s world, RPA is fast-emerging business process automation technology that is closely related to other computer science fields such as Artificial Intelligence and machine learning.

RPA Tools are the product of this technology. They are the software used to reconfigure mundane, repetitive and complex tasks into automated processes. Blue prism, UiPath, Automation Anywhere, and Edgeverve Finacle are some of the top RPA tools industries are using for automated tasks.

Benefits of RPA

• RPA has a wide range of buyers. Due to numerous benefits, the technology has earned a stellar reputation. Apart from the banking and finance industry, it has been adopted by other industries like Healthcare, Insurance, telecommunications, retail, manufacturing, accounting, e-commerce, and human resources. This technology has impacted the global economy enormously and it is deemed to be the future of the business of every industry. Over the last two decades, it has gained a lot of traction from everywhere.
• What makes RPA a trailblazer in the automation industry is its ability to reduce investment and expenditure cost significantly. When tasks are automated, they are performed faster, and a lot can be achieved in less time. Ultimately, it increases efficiency at a much lower rate.
• “To err is human,” stands true especially when it comes to large data work, a huge amount of documentation and data analysis. Risk of errors and mistakes is higher when such tedious tasks are performed by humans. This is where RPA comes to the rescue. With RPA, the work is 100 percent error-free and it ensures high-quality output.
• When all of this is taken care of, it increases the competency and performance of the employees. Also, the tasks that took hours such as documentation, calculations, and updating account details, can now be performed within a few seconds. This allows the employees to focus on their core duties and reach their goals.
• RPA can work round-the-clock, unlike humans without the fear of exhaustion.
• It improves the scope of insights and analytics with the help of automated processes. RPA tools are considered incredibly efficient in organizing, assimilating, tracking, analyzing and storing huge amount of valuable data. All this information can be used to improve and enhance current performance. Furthermore, it can be used to create predictive results.
• Additionally, Robots and automated technology ensures enhanced compliance of policies and regulations.
• It can be integrated and implemented with several technologies and various platforms, at one time.
• The best part of automation is that it allows to configure tasks without disrupting the existing infrastructure. Also, system updates are easily available and can be conducted easily.
• These platforms do not require skilled knowledge. Basic training about the program makes the employees efficient at using these tools.
• There is some fear that AI and RPA will replace humans. However, experts believe that this technology will provide employment opportunities as it is not only being used by large enterprises but also small and mid-sized companies.

 Robotics in the Banking Industry

With the voluminous documentation work that banks need to tackle every day, several banks and financial institutions are advocating the application of RPA in the banking industry. This is to simply minimize errors and reduce the load of workflow.

At the same time, RPA provides an opportunity to banks to remain competitive in the increasingly saturated market. In order to stay ahead in the competition, they must find a way to improve their performance as well as provide the best possible customer experience by catering to each and every client in their customer base.

All of this must be done by maximizing efficiency and keeping the operational costs as low as possible. Simultaneously, they must maintain unbreachable security levels. Robotic Process Automation is one solution to all these problems of the banking and financial industry.

Over a period of time, it has become a powerful tool to transform the banking industry for both customers as well as the employees. Today, RPA is used to perform front-end, back-end, and internal level banking activities. Several business management processes within the banks have benefited tremendously from banking automation. The clientele and business for banks have grown incredibly.  

The presence of AI and RPA technology is prominently seen in the customer experience zone. However, it plays a significant role in the operations of banks and financial services. RPA, along with AI, has drastically improved the speed of work and adherence to regulations and working procedures. The heavy-manual work has simplified leading to the massively successful digital transformation of the banks.

Apart from the above-mentioned benefits, here is how automation is changing the face of the industries. Some of the key areas that have realized the benefits of technological innovation are:

Customer Experience: Customer services offered by the banks have drastically improved. It certainly is difficult for a limited number of employees to answer each and every query they receive. RPA helps employees in resolving queries on a priority basis depending on problems. At the same time, it has reduced effort and time in verifying customer details and enables the banker to provide their customers with the best possible solution based on customer’s banking history and patterns.

Fraud Detection: Fraudulent activities are among the primary concerns of banking institutions. They are highly vulnerable to a breach of security and cyberattacks. RPA help banks in maintaining sophisticated levels of security that are durable and reliable. The high-end RPA platforms are considered more robust than the most complex IT structures. They follow a predictive approach and act even when they sense suspicious behavior. These systems are capable of protecting customers and banks from a potential threat.

Know Your Customer Process: Also popularly known as KYC Process, it is a critical and lengthy procedure, but every bank must go through it in order to ensure the safety of the bank. The tedious task involves a large amount of expenditure and huge FTE’s to verify customers’ identity. Thus, several banks have employed RPA applications to reduce cost and save time and perform the task with minimal errors.  

Compliance: Compliance is one of the most critical parts of banking. With so many rules and regulations to comply with, it can be a challenging task for the banks to achieve the standards set by the regulatory authorities. Therefore, RPA software prefixed with compliance data automatically adheres to meet the levels of standardization.

Apart from this, account origination, account management, KYC Process, deposits, funds transfers, mortgage and loan processing, investment processing, cheque processing, collections, surrenders, customer service, employee training, billing, credit card payments and processing, and report automation are other important aspects of banking activities.

What Lies in The Future?

RPA is constantly improving the banking sector. With so many advantages, banks are now considering using it in all the functional areas and stay ahead in the competition. This is just the beginning; the banking industry is preparing itself for the fast-approaching paradigm shift. Effective implementation of RPA tools has the ability to remove wasteful processing. In the future, RPA platforms will move to UI centric automation and the end customer will provide the input at the processor level, unlike the current situation where the operations are dependent on the developer and not the actual user. The numerous benefits of RPA make it inevitable to the financial and banking services. Banks consider it the leading force that can dramatically improve the industry. As per the reports, by 2025, the RPA industry is expected to grow to $6.7 trillion in the global economy. It certainly is a force to be reckoned with.